Scan or Be Scanned

Behold the QR Code! In China everyone has one, kind of like a belly button. Unlike a belly button, however, this black and white beauty begs to be scanned with your phone. Your QR code is as unique as your fingerprint or your retina, but better, since you won’t need an eyeball transplant when you’re falsely accused of a crime. To live in China means to live (and probably die) by the Quick Response Code.

QR codes have been around for years in the States; they’re simply a new generation of the linear bar codes we scan in self-checkout lines. But QRs have little relevance to the average American’s life, and not even buying groceries in 2018 involves using these two-dimensional block codes. In the States, they’re mostly for encoding manufacturing information on packaging or offered as advertising gimmicks. Some people have said that QR Codes are worse than useless.

But in China the QR code, already omnipresent, is approaching omnipotence. Alibaba took QR technology to new heights when it created Alipay, a comprehensive mobile payment app that conceivably infringes on banking industry turf. WeChat Pay, a separate mobile payment app developed by Tencent, soon followed. WeChat’s Wallet is even more convenient than Alipay since it’s connected to the WeChat social media platform that maintains totalitarian-like dominance over the social lives of everyone in China. WeChat is more versatile: think of it as Venmo, Apple Pay and a Wells Fargo mobile banking app combined with Facebook, Twitter, and Instagram accounts. It’s invincible.

Rent a bike directly off Shanghai’s sidewalks by scanning the QR code to unlock it and then using WeChat to pay for it.

It’s hard to believe, but when we first arrived in Shanghai in 2014, China was still an entirely cash-based economy. Credit cards were scarce, and the international credit card industry hadn’t really made inroads into the daily life of average Chinese citizens. China Merchant’s Bank issued Union Pay debit cards for our bank accounts, but even so, nearly every transaction outside of expensive restaurant meals happened in cash. It was common for expats to joke about fat wallets and pockets stuffed with wads of hundred renminbi notes. Even as late as 2016, it was a mistake to go anywhere without serious bank.

Flash forward to 2018; it’s a different (and awesome) new world in China. I’ve heard stories of foreign travelers arriving here only to find that no one will accept their 100 yuan bills. In the States, every company develops its own app to handle its own micro financial transactions. My iphone is so clogged with stupid apps that I balk when someone (most recently a Target cashier) asks me to download yet another useless one. In China, the only wallet I ever need is on my iphone, and everything can be accomplished via two apps: WeChat and Alipay. No purse, no credit cards, no wads of cash. And to think I once thought Wells Fargo’s mobile deposit technology was cutting edge stuff. Phff.

Everybody here is scanning everybody else, and not with their eyes (which are glued permanently to their phones anyway). It’s become a way of life. Actually, it’s the only way of life since an increasing number of businesses in Shanghai no longer bother accepting cash or debit cards.

From inside Wechat, scan a personal QR code to “connect” to friends; it’s like “friending” someone on Facebook. Scan a QR to get a coupon or discount. Scan a QR to link your app to your computer. Scan to unlock and pay for a bike from the bike share program. Scan to pay the grocer, vending machines, taxis, the fish monger, the chicken man, the avocado lady, the doctor, the street food vendor, the fake market, the art gallery, the sweet potato hawker! Even the rip-off artists selling fake Rolexes on Nanjing Rd. barely accept cash anymore. Scan a QR to pay 5 kwai or 5,000 kwai; it doesn’t matter.

It’s not just scanning either. Want to order dinner? Open your phone to WeChat, order and pay for your takeout. Immediately. Everybody delivers in China! Keep forgetting to pay your friend the 100 rmb you owe him? Just transfer money from one phone to another via WeChat. Transfer money to your spouse, your child, your grandmother. Pay the babysitter and the tutor. It’s just like cash, all on the phone, in split seconds. Transfer money from your bank account into your WeChat or Alipay account. Oh yeah, you’ll earn interest on that money too, since it’s actually sitting in the world’s largest money market funds (essentially ETFs).

I flew home for Christmas break in early December and by the time I got back to Shanghai in January, QR code scanners had been newly installed at the Shanghai metro lines, replacing some of the magnetic card readers! It will soon be possible to ride the metro via the Alipay QR on your phone, no metro card necessary.

Metro tickets by QR code

I keep wondering how the Chinese government can possibly keep track of all these transactions for the sake of collecting income taxes? How does one distinguish between a 3,000 kwai reimbursement from a friend and a 3,000 kwai payment for tutoring? Then I realized that China is still, fundamentally, a cash economy: it’s a cashless cash economy. And that, my friends, (that little tax collection problem), is why I cannot see this happening in America. The ease of transferring cash among individuals would likely increase not decrease the fluidity of the American cash economy. Would Uncle Sam be okay with that?

I fear the best we will ever get in the U.S. is Apple Pay or something similar – just an extra link in the existing financial industry chain—another way of charging your already existing credit card. That’s not innovative. It’s precisely because China is not bogged down by old, behemoth institutions like the U.S. banking, credit, and financial industries (well, and privacy laws), that it has been able to move to a cashless culture in such a streamlined way. That’s the benefit of coming of age in the Age of Technology.

So for now, I’m going to keep loving on my WeChat. Finally, a piece of technology has arrived that actually makes life easier instead of more cumbersome (smart boards and crappy classroom wireless projectors, I’m dissing you!). WeLove WeChat!

Published by Sharol Gauthier

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Actually, the QR codes have already been capped! Now you cannot pay/transfer more than 500 RMB a day to one of those “static” QR codes: http://www.ecns.cn/business/2017/12-28/286303.shtml
Generating a changing code (when the shop scans your code and the money is deducted) is still fine.

Yeah, but static codes tend to be minor payments anyway, like the hawkers and street food stalls and lunch shops. Stores and restaurants that that generate a lot of traffic mostly use the changing code. To me the bigger issue from a fraud perspective would be peer to peer transfers, which we do all the time (someone just repaid me 4,200rmb for a plane ticket that way). There’s no real way to keep track of where money is flowing on transfers.

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